Soon, I’ll be launching a series that explores what a financial planner actually does. But here’s a sneak peek: a core part of the job is taking in new and relevant information—and turning it into something clear, practical, and useful.
Which brings me to the One Big Beautiful Bill.
At nearly 900 pages, it’s a beast—and not the kind I enjoy reading about (looking at you, romantasy dragons ?). But hidden inside all that dense policy language are real, tangible changes that could impact your family’s bottom line.
Below, I’ve curated a list of key tax provisions relevant to military families. This is just the beginning (yes, this bill is that dense), so stay tuned for future posts as we take it one bite at a time.
1. Increased Standard Deduction
The bill extends and slightly increases the standard deduction introduced under the Tax Cuts and Jobs Act (TCJA). This is great news for the many families who don’t itemize deductions.
Key Details:
- Amounts (indexed):
- Single: $15,750
- Married Filing Jointly: $31,500
- Head of Household: $23,625
- Effective: 2025 onward
- Inflation Adjusted: Yes
- Applicability: High
- Why it matters: This directly reduces your taxable income if you don’t itemize—which is especially helpful for younger service members or families still building their financial foundation.
2. Extension of Current Tax Rates
The lower marginal tax brackets introduced in 2017 were set to sunset—but the bill locks them in for the foreseeable future.
Key Details:
- Effective: 2025 onward
- Inflation Adjusted: Yes
- Applicability: High
- Why it matters: Predictability. Permanent brackets provide stability, allowing military families to plan with more confidence.
3. Updated Child Tax Credit
The Child Tax Credit has been increased and will now be adjusted for inflation.
Key Details:
- Amount:
- $2,200 per qualifying child under age 17 (indexed)
- $500 nonrefundable credit for other dependents
- Income limits where the credit starts to phase out:
- Single: $200,000
- Married Filing Jointly: $400,000
- Refundability: Partial
- Effective: 2025 onward
- Applicability: Above Average
- Why it matters: Many military families with young children could benefit from this credit increase.
4. New Tip & Overtime Deduction
A brand-new above-the-line deduction allows eligible workers to deduct some tip and overtime income.
Key Details:
- Deduction Cap:
- Married Filing Jointly: Up to $25,000 in tips and up to $25,000 in overtime
- Single: Up to $25,000 in tips and up to $12,500 in overtime
- Income limits where the deduction starts to phase out:
- Single: $150,000
- Married Filing Jointly: $300,000
- Effective: 2025–2028
- Qualifications: Awaiting final IRS guidance
- Applicability: Below Average (for now)
- Why it matters: Military spouses working in service industries could see real benefit—once we have clearer guidance from the IRS.
5. Temporary Boost to SALT Deduction Cap
The bill temporarily raises the cap on State and Local Tax (SALT) deductions, which can offer meaningful relief for taxpayers in high-tax states who itemize.
Key Details:
- New Cap:
- $40,000
- $20,000 for Married Filing Separately
- Income limits where the deduction starts to phase out:
- Married Filing Separately: $250,000
- All other filing statuses: $500,000
- Even above these income levels, you can still deduct at least $10,000.
- Inflation Adjusted: Yes, 1% annually
- Effective Dates: 2025–2029 (returns to $10,000 in 2030)
- Applicability: Average
- Why it matters: If you’re stationed in—or planning to retire to—a high-tax state like California or New York, and you itemize your deductions, this temporary increase could offer meaningful tax savings.
6. Car Loan Interest Deduction for U.S.-Made Vehicles
Military families often face car purchases due to PCS moves or expanding households. Now, interest on those loans may be deductible—even if you take the standard deduction.
Key Details:
- Deduction Cap: Up to $10,000
- Qualifications: Applies to U.S.-assembled vehicles purchased for qualifying use
- Income limits where the deduction starts to phase out:
- Single: $100,000
- Married Filing Jointly: $200,000
- Effective: 2025–2028
- Applicability: Below Average
- Why it matters: This could be a small but meaningful tax break for families already planning a vehicle purchase.
Final Thoughts
There’s a lot packed into this bill: tax changes, education updates, healthcare provisions, and even defense modernization. But not everything affects your everyday finances—and not all changes start immediately.
My goal? To cut through the noise and zero in on what actually matters to your household, your paycheck, and your financial future.
I’ll keep digging through the fine print (yes, even the boring parts), so you don’t have to. If you’ve got questions or want help applying any of these changes to your personal situation, I’m here.
Because financial planning is a team sport—and Black Dog Wealth is proud to be Your Financial Best Friend through it all.
Disclaimer:
This article is provided for educational, informational, and illustrative purposes only. It does not constitute tax advice, investment advice, or a recommendation to buy or sell any security. The content is general in nature and may not apply to your individual circumstances. I encourage you to consult with a qualified tax professional, financial planner, and/or legal advisor for guidance specific to your situation.